Demand for low-cost laptop processors is plummeting, and not because of chip shortages

How did we get here? The pandemic has triggered worldwide work orders and homeschooling, resulting in huge demand for affordable education-focused models like the Chromebook. As we return to normalcy, the demand for such products is rapidly dwindling. Yet not many expected it to happen so suddenly.

We now have additional evidence pointing to a shrinking low-cost laptop market.

Mercury Research (via PCMag) said the PC industry just experienced its largest drop in notebook processor shipments from the previous quarter. Third-quarter shipments fell more than 18 million units from the previous quarter, according to the PC component market research company.

Entry-level chips such as the Intel Celeron and AMD Athlon were among those hit hardest by the drop in demand. Mercury Research President Dean McCarron called this scenario the worst quarterly downturn for mobile processors in the history of the PC processor market.

In an email to the address PCMagMcCarron said the decline in entry-level processor shipments is not related to the ongoing global shortage of chips. Instead, he pointed to declining demand for entry-level laptops like the Google Chromebook.

McCarron told PCMag that some pullback is expected, but the return to pre-Covid volumes was instantaneous, not gradual.

Mercury’s results are in line with what we heard from Canalys earlier this week, when the company said Chromebook shipments fell 52% qoq and 37% yoy to 5.8 million devices in the third quarter. Tablet shipments also fell 15 percent in the last quarter to 37.7 million units.

Image courtesy of Ryan, Elena Sergienko